Dive Brief:

• The U.S. Justice Department is investigating Lumber Liquidators for potential criminal wrongdoing in its sourcing of flooring, the lumber retailer said Wednesday.

• The company is also facing other investigations from other governmental agencies and at least 100 lawsuits over allegations from an investor that some of its flooring from China contains toxic chemicals. The allegations came to light during a report by 60 Minutes, which conducted its own safety tests.

• The company has defended its flooring and disputed the findings, but also says it’s cooperating. 

Dive Insight:

Lumber Liquidators has been somewhat slow to get in front of this issue. But, despite the fears from many that its flooring could be toxic and despite hits to its share price and earnings, the company seems to be holding its own with customers to a good extent.

A lot depends on the outcome of many of these investigations, and of whether the retailer can establish a renewed safety policy that can save its reputation.